During their 14th summit, in New Delhi on Friday 6 October, the leaders of the EU and India affirmed their commitment to making their economic partnership progress by trying to relaunch talks for a free trade and investment agreement. These talks have not moved forward since 2013.
The EU and India trade in goods and services for €100 billion per year, with trade in goods "almost perfectly balanced" between the two parties. The EU is India's first trading partner (covering 13% of its trade) and its main investor, "and all of this will remain true beyond March 2019 when the United Kingdom leaves the European Union", European Commission President Jean-Claude Juncker stated at the end of the summit.
"With this in mind, I believe it is time for a free trade agreement between India and the European Union", he said. "Once the circumstances are right – and only once the circumstances are right – we will resume. Today's summit is an important step in the right direction and our chief negotiators will sit down in the next coming days to chart a way forward", he added.
According to a source close to the issue at the Commission, the chief negotiators from the EU and India are expected to meet again in November in order to reassess the two sides' ambitions for resuming the difficult talks for a bilateral trade and investment agreement (BTIA). These talks were launched in 2007, but were put on hold in mid-2013 (after 16 rounds of negotiations) ahead of the general election in India in spring 2014 which brought India's Prime Minister Narendra Modi to power. The two parties were not at that time able to iron out their differences on several key chapters (see EUROPE 10931).
The stumbling blocks are still the same: the EU wants a more accommodating position from India as regards India's ambitions on tariffs (in the automobile sector, wines and spirits, and also the agricultural domain), access to public procurement and protection of geographical indications. India wants better access to the EU market for its service providers and a softening of visa regimes to allow its qualified workers, particularly IT specialists, to move freely within the EU.
The issue of investment protection is also a key issue, especially as India's decision in summer 2016 to stop its bilateral investment treaties with European countries will not have an immediate impact on current investments (which will continue to be protected for 10 to 15 years) but could affect new investments.
Juncker also asked India to move forward on the issue of data protection, calling on the country to accept the EU's "highest standards of data protection" to ensure the free movement of personal data between the two economies. "Indian companies have specialised in offering back office and IT services to European companies. Many of these services – and the jobs that go with them – depend on the exchange of data. If India's standards of data protection are converging with those of the European Union, the European Union will be in a position to recognise the adequacy of India's rules. This is a precondition for exchanging personal data freely and securely", he stated.
In addition, in a thinly veiled address to US President Donald Trump, Juncker also spoke of the EU and India's commitment to free trade. "We are – India and the European Union – the loudest voices in the world for free and fair trade", he said.
In their joint statement, the European and Indian leaders reaffirmed the key role of the WTO and the importance of strengthening free, fair and open trade to achieve sustainable growth and development. The two parties reaffirmed their commitment to working together with all the members of the WTO to obtain "concrete results" at the 11th WTO ministerial conference to be held in Buenos Aires in December. (Original version in French by Emmanuel Hagry)